ONSHORE DISPOSITION OF OFFSHORE OIL AND GAS PLATFORMS:WESTERN POLITICS AND INTERNATIONAL STANDARDS

by

Allan G. Pulsipher and William B. Daniel IV1

Center for Energy Studies Louisiana State University

Baton Rouge Louisiana, 70803 225/388-4550

ONSHORE DISPOSITION OF OFFSHORE OIL AND GAS PLATFORMS:WESTERN POLITICS AND INTERNATIONAL STANDARDS

ABSTRACT

Onshore-only disposition of retired offshore oil and gas platforms has become a core strategic

objective for ocean/environmental advocates and policy-makers. Although international oil

companies oppose an onshore-only requirement, its rejection is no longer a high priority for them.

The ascendancy of onshore-only disposition reflects a rational and predictable response to

political attitudes, values, and expectations in Western Europe by both governmental

policymakers and petroleum industry strategists. Repercussions from the fight over the disposition

of the obsolete Brent Spar offshore oil storage and transfer facility are the proximate cause of the

shift. It was not the result of new scientific information, better engineering practice, or changes in

the offshore experience of the oil and gas industry worldwide. Onshore disposition has been used

voluntarily for most platforms that oil and gas companies have retired because it was the least

expensive course of action. But as platforms move further from shore toward deeper waters

onshore disposition is more frequently inferior to other disposition alternatives–from both an

environmental and economic point of view. If onshore-only disposition were to become an

international standard, either de facto or de jure, some offshore producing areas would incur

significantly higher disposition costs and lose opportunities to better utilize and protect their

marine resources.

* * *

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ONSHORE DISPOSITION OF OFFSHORE OIL AND GAS PLATFORMS:WESTERN POLITICS AND INTERNATIONAL STANDARDS

1. Making onshore-only disposition2 of platforms an international standard

A common wisdom has been forming among environmentalists that the only “right” or

“environmentally correct” thing to do with retired offshore oil and gas platforms is to dismantle

them completely and bring all their component parts to shore for disposal and salvage. The

objectives of this paper are to discuss the evolution of this view and to evaluate onshore-only

disposition as an international policy standard for managing offshore ocean resources.

1.1 The U.K./Norway reversal.

The best evidence of the shift in favor of onshore-only platform disposition is the reversal

of traditional positions that took place at the meeting of the 1998 OSPAR Commission3 in

Portugal. At that meeting both the British and Norwegian governments dropped their long-

standing opposition to such a requirement and joined with their Northern European counterparts

in accepting “onshore-only disposition” for North Sea platforms fabricated from steel. 4 These

two governments have jurisdiction over most of the North Sea platforms and incur directly or

indirectly costs of decommissioning and disposition of such platforms. In the past their insistence

on case-by-case decision-making for the disposition of platforms had been steadfast. Their

agreement signifies that they acknowledge they will be bound by the OSPAR agreement.

Undoubtedly there were many reasons that the British and Norwegian governments

reversed their positions. Two of the more important considerations, however, probably were that:

• First, built into the agreement was an implicit exemption for the twenty-three very large

concrete platforms in the North Sea that would be very expensive to remove, if not

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impossible to remove entirely. Fourteen of the seventy platforms under Norway’s

jurisdiction are of this type, as are nine of the 180 installations under British control. Their

complete removal has been estimated to add as much $16.5 billion to the North Sea

platform disposition costs.5 Moreover, some suggest that other implicit exemptions or

loopholes, were also included in the OSPAR agreement. Consequently, the onshore-only

provisions of the agreement may not be as unambiguous as they appear.

• Second, the success of environmental organizations who triumphed in the battle over the

disposition of the Brent spar boosted their political clout,. The environmentalists were led

by Greenpeace, but included the “Green” political parties prominent in Western European

countries. In the eyes of many, their victory validated both Greenpeace’s assumption of

environmental leadership in this area and their claim that onshore-only disposition of

platforms is the only environmentally responsible and morally defensible policy for

countries to follow. 6

These two considerations are closely interrelated. The “political clout” that Greenpeace

and its allies demonstrated in the Brent Spar episode made the oil and gas industry willing to pay

more for “insurance” against having to spend yet billions more trying to remove the very large,

concrete North Sea structures. Had Greenpeace’s efforts failed, it is likely that the U.K. and

Norway would have maintained their opposition to the onshore-only requirement. Further, the

perception of and respect for the political power of the environmental advocates of onshore-only

disposition may well prevent the loopholes in the OSPAR agreement from being utilized.

1.2 The relevance and irrelevance of the Brent spar campaign

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The Brent spar episode was an international news event that has clearly, if misleadingly,

defined the platform disposition issue for the public, as well as most private and public

environmental/ocean organizations.

A point regularly glossed over in the debate was that the Brent spar was neither an oil

platform nor an oil rig, but a storage repository and transfer point for North Sea oil produced

before pipelines were operating. It was a closed, cigar-shaped structure 137 meters in height,

with a diameter of 29 meters, weighing, empty, about 14,500 tonnes. Most of the structure was

submerged. It was kept in position by six anchors in the seabed. In addition to living quarters and

a landing pad, it consisted of ballast compartments to keep it afloat and stable and six large,

vertically stacked, storage chambers big enough, in total, to accommodate 300,000 barrels of oil

awaiting transfer to tankers. The technical aspect of the debate was how much toxic residue

remained in the Spar’s tanks and piping after it was drained and readied for scuttling.

The controversy over the Spar’s disposition began in 1994 when Shell Oil Company

proposed to decommission the no-longer-needed, 1970s vintage, storage and transfer facility.7

Decommissioning requires removing all the oil and oil residues from storage tanks and pumping

equipment that can be removed without cutting or dismantling the structure. Heavy metals and

other toxic materials that have concentrated over the operating life of the facility remain in the

residual sludge in the storage tanks and piping. After decommissioning, Shell proposed towing the

facility to a deep ocean site 150 miles from shore where it would be scuttled and sunk in 6,000

feet of water.

After Shell’s plans were approved by the British Government and released to the public,

Greenpeace, an international environmental organization well known for its use of dramatic direct

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action and civil disobedience, announced its opposition to the plan, which it termed “flagrant

ocean dumping.” Toxic residues remaining in the Spar’s storage tanks and piping after they were

cleaned and flushed were the focus of Greenpeace’s concern. Their argument was that since the

facility began operating in the 1970s, toxic heavy metals had accumulated in the sludges in the

tanks and remained there after the tanks were emptied. The consequences of introducing such

toxic sludges to the deep ocean were unknown, they said. Further, they could not be adequately

monitored nor, if necessary, retrieved if the facility were sunk in 6000 feet of water. Thus the

environmentally correct course was to bring the facility to shore.8

In the summer of 1995–following an unexpectedly fierce campaign featuring widespread

consumer boycotts, letter and fire bombs, vandalism,9 and Greenpeace’s very telegenic boarding

of the spar from helicopter at sea as it was being towed to the deep ocean disposal site -- Shell

declared defeat and canceled its at-sea disposition. Figures 1.1 and l.2, taken from the German

news magazine Der Spiegel10, capture better than words the intensity of the “debate.”

Research completed subsequent to Shell’s capitulation has strengthened the case for

Shell’s original proposal.

• First, measurements of the residual sludges showed that Greenpeace’s estimate of the

tonnes remaining in the spar’s tanks and pipes was too high by an order of magnitude.

• Second, scientists reported in Britain’s flagship scientific journal Nature that natural vents

and seeps in the deep ocean floor at the proposed disposal site were releasing toxic heavy

metals in amounts many times greater than Greenpeace’s original estimate of the spar’s

load.

5

Figure 1.2

Fig 1.1

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• Further, some of the deep ocean life forms at the proposed “dump site” use and, perhaps,

depend on many of the same “toxic” materials resident in Brent Spar’s residual sludge.

As Nature editorialized about its article: “[T]he bacteria on the ocean floor would have

greeted the arrival of Brent spar as if all their Christmases had come at once.”11

By January of 1998, Shell was reported to have spent $33 million simply to remove,

repair, tow and store the facility while deciding on its disposition. Shell’s new plan for disposal of

the platform was estimated to cost about $41 million. This is about $10 million more than the cost

of the original disposition plan (not including the $33 million for interim storage). Ironically,

perhaps, the new disposition plan calls for “slices” of the storage facility to be cut and submerged

and used as part of the foundation for a new wharf.12

The “real” costs to Shell, however, were current and future sales lost as a consequence of

the boycott and damage to Shell’s public image as a trustworthy and environmentally responsible

company. No estimates of these costs have been made public, but they probably are larger than

those directly incurred. With such events still fresh in their memories, it is not surprising that

neither Shell’s top managers nor the region’s political leaders want to deal with contentious

platform disposition issues.

The scientific ironies that surfaced during the Brent Spar episode are entertaining, but

largely irrelevant to the current debate about platform disposition. The fact that Greenpeace,13 the

editors of the Wall Street Journal,14 Nature,15 and many others, repeatedly referred to the Brent

Spar storage and transfer facility as an “oil platform” or “oil rig” is indicative of more than simply

confusion as to appropriate technical terminology.

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Standard engineering practice for decommissioning a platform for at-sea disposal requires

that the structure be stripped to its bare steel or concrete. No storage tanks or residues of any

kind are submerged if the structure is sunk. Brent spar was a large “floating” storage tank.

Concerns about residual toxic sludges do not apply to bare steel or concrete structures.

Prior to platform disposition, all wells and well conductors are cut and permanently plugged as

they would be if the structure were brought to shore. There are neither persuasive theoretical

arguments nor empirical evidence that a submerged platform so decommissioned has caused or

will cause damage to ocean environments.

This factual engineering distinction underscores a key point. Opposition to at-sea

disposition, at its core, is political or moral, not scientific or environmental. Of course this does

not mean onshore-only proponents are “wrong.” Political or moral arguments often outweigh

scientific or environmental considerations, but it is good to be clear as to the terms of the

argument. Further, although the scientific and engineering aspects of the Brent Spar controversy

have little policy relevance to the larger “at-sea versus onshore-only” platform disposition dispute,

the political and economic aspects of the controversy are relevant and instructive.

2. Some micro-politics of platform disposition policy

Although private-sector oil companies believe that “onshore-only disposition” is an

unnecessary, unwise, and inefficient policy based on their evaluation of the scientific evidence

(i.e., their acquiescence is not a result of inadequate information or faulty analysis) apparently

they also do not believe it would be prudent economically or, more important, politically to make

a consequential effort to oppose its adoption given the prevailing attitudes and circumstances. In

the world of large (and larger) international corporations, future pain is discounted heavily, and

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raising pessimistic expectations is usually labeled “asking for trouble.”

Similar reasoning prevails on the governmental side. It is just as unappealing politically for

leaders in the public sector to oppose the onshore-only standard as it is in the private sector,

especially in those jurisdictions in which the decommissioning phase of oil’s life cycle is just

beginning or has yet to begin. Thus, this is a case where the incentives facing decision-makers in

both the private and governmental sectors are likely to result in socially inefficient decisions.

2.1 - Industry decision-making.

The profits of oil and gas companies would increase, all else equal, if a more efficient and

cheaper method of platform disposition were to be adopted. The magnitude of such savings,

however, would be less than it would cost to deal with a public relations nightmare like the Brent

spar episode. Even in strictly monetary terms, the Brent spar’s costs have outweighed the

prospective cost savings from deep ocean disposition several times over.

Although disposition costs will increase substantially as larger platforms further from

shore are decommissioned, the attention of top management at large companies is usually focused

on quite short-term financial results. Further, rising costs or their cumulative magnitude over the

long term are often seen by top managers as “the next guy’s problem.”

2.2 - Environmental Politics

A similar logic explains the attitudes of politicians. Decommissioning and disposition of

offshore platforms is a specialized, complex process. There is not much incentive for politicians’

constituents or for politicians themselves to invest the time and effort necessary to become

informed. The lack of information or misinformation evident in the Brent spar case was explicitly

recognized by Greenpeace, as is clear in a much cited statement made by Greenpeace’s pointman

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Jochen Lorfelder during an exchange with the chairman of Shell’s German subsidiary. In response

to the chairman’s explanation of scientific superiority of at-sea disposition, Lorfelder is reported

to have replied: “But Joe Six-Pack won’t understand your technical details. All he knows is that if

he dumps his car into a lake, he gets fined. So he can’t understand how Shell can do this.”16

In this and many other areas of public policy, individuals and their legislative

representatives rely on a more general ideology or “attitude” that reflects values and perspectives

with which they usually agree. It is just too “expensive,” usually in time, to try to become well

informed about complex issues that do not have a direct impact on an individual’s own well being.

Instead we rely on “ideological habits,” sometimes characterized negatively as “knee jerk

reactions.”

Similarly, within the community of organizations with a common concern for the

protection of the environment, there is considerable specialization and division of labor.

Greenpeace is the environmental organization that provides the ideological backdrop for platform

disposition policy–especially in Europe and in international organizations17. Greenpeace is a

direct-action-oriented, more-militant-than-average environmental organization for whom issues

are usually seen as “good or bad,” “black or white,” but rarely as shades of grey. Comparing costs

and benefits of alternative courses of action is not a strategy or tactic they use.18

The protection of oceans and the marine environment properly has a very prominent place

in popular political ideology. Individuals with very different views about many other areas of

social and economic concern often agree that providing such protection is a quasi-religious,

generational, responsibility. Such widespread personal and political predilection toward preserving

and protecting the environment usually casts the burden of proof on those who question or

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disagree with what is perceived as an “environmentally correct” proposal or authority. Thus,

politicians naturally support, or avoid, environmental issues unless the allegiance of a strong

source of their own core support is at stake.

2.3 - “Public” or “nonmarket” attributes of offshore platforms

Even if politicians, bureaucrats and businessmen were to agree, there are attributes of

offshore platforms that may lead to bad public policy. Specifically, there are services that

platforms provide that are not, and perhaps cannot, be included in the ordinary calculations of the

market place–as a consequence of what economists call their “public” or “nonmarket” attributes.

For instance, in the Gulf of Mexico some offshore platforms have become important

navigation references for recreational and commercial fishermen and other boat owners. In this

aspect they correspond exactly to the example that economists since the time of John Stuart Mill

have used to explain the characteristics of a “pure public good,” i.e., a good or service that the

government, or some sort of a cooperative or club, but not the market, must provide–the

lighthouse.

As the story goes, once a lighthouse exists, it is difficult to deny anyone its services. If the

lighthouse’s services can be consumed without paying for them, then potential consumers have no

incentive to pay for them voluntarily. If potential entrepreneurs cannot exclude consumers that

don’t pay from consuming the services of the lighthouse, they will not build lighthouses. Thus, by

default the government will have to pay for lighthouses with taxes collected coercively, if

necessary. To complete the analogy, since the companies that own platforms have no way to sell

the platform’s services as a navigational aid to consumers individually, those services never enter

the revenue/cost calculus that the company uses to make decommissioning and disposition

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decisions.

There are other such “non-marketable” attributes of offshore platforms.

• Migratory birds and migratory butterflies both use platforms as rest stops.

• Marine mammals and sea turtles have also been seen making use of platforms for

transitory resting or sleeping.

• Commercial fishermen use platforms as dump sites for marine debris that they “catch” in

their nets while trawling.

• Existing platforms provide “trawl-free zones” that protect a multitudinous collection of

bottom-inhabiting creatures whose role in ocean ecology is not very well understood.

Larger “trawl-free zones” could be created quite cheaply by strategic placement of retired

platforms.19

• In some ocean environments, offshore platforms have added very significantly to the

available habitat required by some highly valued species of fish. Surveys of recreational

fishermen on party boats indicate that the destination of about two-thirds of their trips in

the Gulf of Mexico is an active platform or an artificial reef made from a platform.

Removing platforms to shore decreases habitat that often has been in place for two or

three decades.

These “nonmarket” or “external” services of offshore platforms will not be reflected in the

decommissioning plans and decisions determined solely by market factors. Whether they are

significant enough to warrant inclusion in the procedures or regulations governments implement

depends on the importance of such factors in each unique setting. But, regardless, in purely

economic terms, disregard of these “public” aspects of platforms will tend to push or bias

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decisions toward onshore disposal.

3. Alternative methods of platform disposition

Does the adoption by the industrialized countries operating in the North Sea of the

“onshore disposition only” rule imply that it would be a good international standard? To answer

this question, the alternatives to onshore-only disposition need to be articulated.

. 3.1 Common characteristics or assumptions

Before comparing options, some assumptions common to all of the disposition alternatives should

be understood.

• First, all of the options are assumed to require the removal of all equipment, crew

quarters, storage tanks etc., before disposition of the platform begins. The “platform” to

be disposed of in all of the alternatives, thus, is assumed to be a steel or concrete structure

cleaned and cleared to its structural elements.

• Second, all wells and well conductors are assumed to be required to be severed and

plugged according to uniform regulations. Site clearance or clean-up procedures and

costs, however, as discussed subsequently, vary with the disposition option compared.

• Third, it is important to note that the environmental and economic consequences of each

option are dependent to a considerable degree, upon the unique characteristics of the

platform and the site on which it is located. For example, in areas of the world’s oceans

where “hard bottom” or “reef” habitat is relatively scarce or inaccessible, such as the Gulf

of Mexico, the value of a platform, either operating or made into an artificial reef, is higher

than it is in those areas where this type of habitat is plentiful and easy to get to. These

regional and site-specific differences make it impossible to calculate an unambiguous

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overall “score” for the options compared.

3.2 - Defining disposition alternatives

The options to be compared are defined as follows:

• Onshore Disposal Only (ODO). All elements of the platform are removed to shore for

salvage or reuse, and the site is cleared of all obstructions and debris.

• Postponing Platform Removal (PPR). The platform is permitted to remain in place for

some length of time after production ceases.

• Platform-To-Reef (PTR). The platform is converted to act as an artificial reef for fishing

or diving or used in some other way to improve marine habitat.

• Partial Removal of Platform (PRP). Only the upper portion of the platform is removed,

to avoid risks to safe navigation, but the lower portion remains in place

• Platform Toppled in Place (PTP). The platform elements are severed at the mudline and

toppled to sea floor

• Deep Ocean Disposal (DOD). The decommissioned platform is towed to a deep ocean

disposal site and sunk, as is commonly done with ships.

3.3 - Direct costs of alternative disposition procedures to platform operators.

As the size of the platform, water depth, and distance from onshore salvage facilities

increase, the economic gain possible from at-sea disposition grows. An ICF Resources study for

the American Petroleum Institute estimated that the at-sea options “can result in savings of 30%

to 65% over the cost of total removal.”20 Although the physical, economic, and political

environments differ in each country and in each offshore producing region, the basic economic

relationships among platform size, water depth, and distance to shore will still hold. Some large

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operators in the Gulf of Mexico assume that platforms in water deeper than 150 feet (46 meters)

will be “reefed” rather than brought to shore because of the large cost differential.21

The two principal oil-and-gas-related artificial reef programs operating in United States,

those administered by the States of Louisiana and Texas respectively, both incorporate the

principle that cost savings (i.e., reductions in disposition costs calculated from an estimate of the

costs of onshore disposal) to platform operators are to be shared equally with the state’s treasury.

In this sense the state’s taxpayers also will “lose” if the least expensive disposition procedure is

not employed. This effect, along with others, is discussed below as an external or indirect effect.

Table 3.3 - Platform disposition options compared and ranked by their effects on the direct costs of platform operators.

OPTION ODO -OnshoreDispositionOnly

PPR -PostponingPlatformRemoval

PTR - Platforms to Reefs

PRP - PartialRemoval ofPlatform

PTP -PlatformToppled inPlace

DOD - Deep OceanDisposal

RelativeRank:6 = highest,1 = lowest

[1-6] [1] [3-4] [2-6] [2] [3-6]

Comments - Cheapestfor smallerplatformsnear onshoresalvagefacilities.

- Costs risewith size,water depthand distance.

-Discountedcosts are lessthan currentcosts.

- May lower eventualdispositioncosts viascale andmarshalingeconomies.

- Size/depth/distance andany requiredsharing ofcost-savingsdeterminecosts. - Costs ofsite clearanceand towing incurred.

-No towingor siteclearancecosts

-But somesupport thisoption onlyif explosivesare not used

- No towingor siteclearancecosts

- No ban onexplosiveshas beenadvocated.

- Siteclearanceand towingcostsincurred

- Distance to“deep ocean”site couldmake mostexpensiveoption formostplatforms.

As compared in Table 3.3, either Onshore Disposition Only (ODO) or Postponing

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Platform Removal (PPR) could be the least-cost option depending on the circumstances of size,

distance, and water depth. The ODO option could also be the most expensive option, depending

on these same circumstances. For small platforms in shallow water, located close to salvage and

refurbishing facilities, especially if the structure can be rehabilitated and recycled for use

elsewhere--onshore disposition usually will be the least-cost alternative. But it can also be the

most costly if it is a large platform, in deep water, far from salvage facilities.

Although complementary rather than competitive to the other five options, the cost

savings from Postponing Platform Removal (PPR) depend on the costs of preventing corrosion

and structural deterioration, the discounted or present value of the costs postponed, and the

continuation of the costs of protecting the owner from liabilities created by the existence of the

platform. Although this option could precede any other, it is a relevant comparison because of the

technical feasibility of postponing removal for a considerable period of time–two or more decades

for platforms that are already 20 or 30 years old. Thus, if permitted by regulation, PPR would be

a short-to-medium-run alternative to other disposition options.

Differentiating among the other four alternatives rests largely on whether site clearance or

towing costs would be incurred. Platform-to-reef (PTR) and Deep Ocean Disposal(DOD) by

their nature require that both costs be incurred. Following the site clearance regulations of the

U.S. Minerals Management Service, the agency that regulates platforms in federal waters, can

result in substantial costs. All marine debris within a radius of about 400 meters around the

center of the site must be removed and after the removal, the site has to be trawled completely

with standard fishing equipment, completely, in two passes made perpendicularly to each other.

For a large platform in deep waters such costs can exceed a million dollars.22

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Towing costs depend on the size and complexity of the structure to be transported and the

distance to its final destination. Moving large structures with large equipment is feasible only

when weather conditions are favorable. Unanticipated changes in weather patterns can prolong

“day charges” for towing equipment that often can exceed $100,000 per day. Under current

conditions, it is likely that DOD, if allowed, would be cost efficient for only the largest fixed

structures in the deepest waters. The largest fixed structure now operating is Shell’s Bullwinkle

platform located in 1350 feet (411 meters) of water in the central Gulf of Mexico.

The structures being used to develop the “deep water” reserves in the Gulf of Mexico are

not fixed but are in some sense floating structures. Most are designed with reuse in mind.

However, if regulations were to require such structures be taken to shore for salvage, this may

not be feasible without an expensive, major, dismembering at-sea.

3.4 - Effects on marine habitat and other ocean users

3.4.1 – Habitat. Many of the principal indirect or external costs and benefits of

platform disposition practices are driven by the consequences of removal or non-removal on

marine habitat. Keeping in mind that the significance and magnitude of habitat effects depends on

the unique physical, ecological, and geographic characteristics of the marine environment in which

the particular platform in question is located, clearly the best disposition option judged by effects

on the marine environment and other oceans users (as shown in column two) is simply

postponing the disposition process. It is not a parallel option, of course, since it could precede any

of the others. The option should be included as a relevant managerial and policy alternative,

however, since platforms have remained in place for thirty, forty, or more years, and, from an

engineering standpoint, it would be feasible to keep many, if not most, existing platforms intact

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and safe for at least one or two decades beyond the time that current regulations require.

The United States’ disposition rules require the removal of the platform within one year

after production on the lease, not on the platform, ceases. Exceptions to this rule are possible

when the platform is used for other functions such as a component of a pipeline system. The

oldest platform still standing in the Gulf was installed in 1942.[query to ric still open]

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Table 3.4 - Platform disposition options compared and ranked by their relative effects on marine habitat and other ocean users

Option ODO -OnshoreDispositionOnly

PRP -PostponePlatformRemoval

PTR -PlatformsToReefs

PRP -PartialRemoval of Platform

PTP -PlatformToppled inPlace

DOD -DeepOceanDisposal

RelativeRank6 = worst,1 = best

[6] [1] [2-4] [2-4] [2-4] [6]

Comments:Habitat

– Reef/hard-bottomhabitat lostpermanently.

–MarineHabitatunchangeduntileventualremoval.

–Habitat lostat onelocation butreestablishedat another.

–Mostproductiveupper part islost.

–Mostproductiveupper part islost.

– Same as orworse that PRP in deepwater.

–Net gainpossible inshallowwater.

– Same asODO.

Comments:other effects

–Habitat lostis valuedhighly byrecreationalfish/diveindustry/en-thusiasts.

–Area opento trawl isincreased.

–State losesits share ofcost-savingsrealizableunder otheroptions.

–Barriers totrawlingremain.

–Continued“aestheticinterference”for somecoastalresidents orconservat-ionists.

–Sharing ofcost-savings(frompostponing)possible.

–Althoughhabitat lost isestablishedelsewhere, itmay be lessaccessible,thus lessvaluable torecreationalfishers anddivers.

–Sharing ofcost-savingswith state iscustomarypractice.

–Less productivehabitatremains andsupportsfewer fish,but, snappersand groupersprobably notaffected.

–Sharing ofcost-savingspossible.

–Same asPRP.

–Sharing ofcost-savings possible.

--Habitat lostas in ODObut likely tohave beenmuch lessaccessible,hence, lessvaluable.

–Sharing ofcost-savingspossible.

The onshore-only, ODO, and deep ocean disposition, DOD, have the worst negative

impacts, totally eliminating habitat which often has supported marine life for twenty or thirty

years. The significance of the loss of habitat under either of these two disposition alternatives

depends on relative scarcity of natural reef habitat and the stress that users may be creating for

such habitat.

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In the Gulf of Mexico the installation of offshore platforms is estimated to have increased

reef habitat by from 50 to 100 percent, depending on the estimate of the naturally occurring reef

habitat used in the calculation. Very active sport and recreational fishing industries use this “new

habitat” extensively. In 1987, an MMS analyst estimated that 70 percent of all fishing trips in

Louisiana to offshore Gulf of Mexico sites had offshore platforms as destinations.23

Although the habitat impacts of the three other options shown in Table 3.4 are more

destructive than postponing removal and probably less destructive than onshore or deep ocean

disposition, the relative ranking among them can not be determined without reference to the

unique setting of each platform, particularly its water depth. Recent research indicates that

evaluated in terms marine life supported, the first 80 to 100 feet of the structure below water is

the most important.24 A before-and-after study of platforms that were severed and partially

removed at a depth of 85 feet, and a platform toppled in place in about 300 feet of water showed

a “before” total fish population of 30,000 fish and an “after” population of about 10,000 fish at

the partially removed platform and only 5,000 fish at the platform toppled in place. However,

almost all of the population drop took place among fish that are not sought by recreational

fishermen. The population of groupers and red snappers that most recreational fishers and charter

boat operators target showed little if any before/after change at the two platforms. Since fish

censuses have shown very large and irregular swings in the number and species resident at

platforms, more data are needed to establish the habitat consequences of partial removal.25

If such studies confirm that highly valued fish are unaffected by partial removal, then this

option as well as toppling in-place and artificial reef options would have larger habitat conserving

impacts – at least in shallow or intermediate water depth locations. If studies find that the fall in

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the total fish population leads to changes in the population of highly valued species, then partial

removal (PRP) or toppling (PTP) or artificial reefs (PTR) may not be much different than ODO

or DOD. Whether existing minimum depths required for navigation or, more importantly,

trawling reduce significantly the potentially positive habitat impacts of these options clearly is a

question that needs to be answered before platform disposition standards are adopted.

3.4.2 – Other ocean users. The controversy created by platform disposition policies or

proposals arises largely from concerns about possible external effects on, or conflicts with, other

ocean users or beneficiaries. But few of these effects have been described and fewer still

quantified. For example, although there has been much favorable comment about the artificial reef

programs in the Gulf of Mexico, there has been no estimate of their value or return to the

recreational fishermen and charter boat operators that make use of them. Without such data,

planning or managing artificial reef programs remains a subjective and, some would argue,

paternalistic activity.

Some analysts believe the concerns of other users could be incorporated into and reflected

by the allocation of ocean uses among ocean users, if the important external effects created or

canceled by platform disposition activities could be bought and sold in the market place . For

example, if the platform owner controlled access to the water column in and around the platform

and could sell such access to fishers or fish farmers, then the returns from these activities would

be incorporated into managerial decisions concerning platforms–including disposition

alternatives. Others argue that ocean management involves considerations that rise above such

economic considerations and must be decided directly by governments.

However, as outlined previously, existing legal and regulatory regimes for ocean resources

21

permit and create many important external effects. Further, although costs to some ocean users

under one alternative may be of benefit to other users (e.g., benefits to recreational fishers of

using retired platforms as artificial reefs) impose a cost on commercial fishers and shrimpers by

decreasing the area available to trawl, there is no presumption that benefits are equal to, greater

than, or less than their corresponding costs.

In the United States the savings from at-sea disposal are divided between the company

who owns the platform and the governmental agency responsible for the at-sea disposition

program. Thus, every platform that is brought to shore that could be disposed of less expensively

at sea, also represents an external cost in terms of governmental revenues that are lost

permanently.

The most important external cost that the disposition of retired platforms may create for

other ocean users is the loss of habitat for reef fish that may be valued very highly in some marine

environments such as the Gulf of Mexico. Again, disposition options ODO and DOD would

impose the largest “losses” (or failure to realize benefits) of this kind. Table 3.4 makes a modest

distinction between them on the grounds that most platforms for which DOD would make

economic sense are likely to be less accessible and hence less valuable to fishers and divers.

The aesthetic or scenic costs which some coastal residents and environmental groups

argue platforms create, particularly if they are visible from land, are also acknowledged in the

table. Just as many individuals believe they are better off if a scenic or wilderness area is

preserved–whether or not the area is visible or accessible to the individual–so some coastal

residents and others argue their wellbeing or satisfaction would be enhanced if no new platforms

were installed. Similarly, commercial fishers who trawl for a living argue that failure to remove

22

platforms prevents a recovery/expansion of their rightful domain.26

Considered in the abstract, the arguments of preservationists and fishermen are powerful

determinants of public attitudes, especially the former. The power of the preservationists’

arguments is reflected in the fact that either state-level or federal moratoria now block the

installation of new platforms along most of the U.S. coastline except the western and central Gulf

of Mexico.

In the case of platform removals, however, only very modest weight is given these

considerations in the ranking shown in Table 3.4. In terms of aesthetics and freedom to trawl,

platform removals proceed too slowly and incrementally, relative to the total stock of platforms

in place, to elicit the intensity of concern that platform installations in a new, undeveloped area

do. In environments such as California which has only 23 operating platforms, some large and in

relatively deep water, this generalization may not apply as well as it seems to in the Gulf of

Mexico with its approximately 4,000 platforms.

In Louisiana, the approved artificial reef sites reside an average of 30 miles from shore and

range between 15 and 100 miles from shore. Especially those at the distant end are not very

accessible to recreational fishermen making day-trips. However operating platforms are accessible

and are used heavily.

From a marine environment/habitat perspective, as platforms are decommissioned and

removed, there is a net loss, both as direct habitat and as a factor that reduces the pressure on

natural reef habitat. The economic impact of this loss is multiplied by the fact that the more

accessible platforms, closer to shore, are usually those that are likely to be the first to be removed.

So far, in the U.S. Gulf, only about one out of every fourteen decommissioned platforms

23

ends up as artificial reefs.27 There are two reasons for this low conversion rate. First, the platforms

that have been decommissioned have been relatively small and close to shore, which makes

onshore salvage or refurbishing for reuse a better option from an economic point of view. The

economic disadvantage of onshore disposal grows as the size of the platform and the distance to

shore increase.

The second reason for the low conversion rate is that the areas authorized by Louisiana

for creating artificial reefs are quite far from shore, which increases the economic advantage of

onshore disposition. Texas’ program is more liberal and authorizes the creation of an artificial reef

by toppling platforms in place as long as doing so does not interfere with other ocean users. The

areas off the Texas coast where toppling is permitted are residuals remaining after areas required

by other users are specified. But the relative discrepancy between the Texas- and Louisiana-

administered programs is still dramatic. A recent paper by L. Dauterive of MMS’ New Orleans

Office indicated that the Louisiana artificial reef program had attracted 83 platforms compared to

45 in Texas28. However, there are almost seven times as many platforms (3,466 according to our

data base) in the waters feeding the Louisiana program as are eligible for Texas’ program (509),

and, more specifically, 1,488 platforms have been removed from Louisiana’s waters compared to

217 from Texas’. Thus Louisiana has retained about 5.5 percent of its retired platforms as

artificial reefs while Texas has retained almost 21 percent.29

Similarly, the relative advantages and disadvantages of the alternatives to onshore disposal

will change with the economic, political, and physical attributes and aspirations of each country.

For example, a wealthy country with only a few offshore platforms close to shore, extensive

natural reef or hard bottom habitat, and an active environmental movement might rationally select

24

a quite different policy option than a poor country with many large platforms, located far

offshore, with little hard-bottom habitat, whose political agenda is driven by aspirations for more

rapid economic development.

4. What is a “large” platform?

The previous analysis indicates that economic evaluations will quite likely suffice to ensure that

smaller platforms, in relatively shallow water, close to shore, will be brought to land for salvage,

or refurbishing. Thus at-sea disposition alternatives probably are relevant only for deliberations

concerning large platforms in fairly deep water. Estimation of possible costs of enacting Onshore-

Only as an international disposition standard requires that such a “large platform” be defined .

4.1 - Conservatism of current international standards.

The International Maritime Organization (IMO) says that all platforms weighing less than

4,000 tonnes located in less than 75 meters of water are to be removed to shore for salvage or

disposal in their entirety. Larger platforms in water deeper than 75 meters can be cut at the 55

meter depth and brought to shore. The clearance to 55 meter depth presumably would ensure that

there would be no threat to navigation.30

These requirements seem unrealistically conservative. The Louisiana Offshore Oil

Port(LOOP) is a facility designed to permit direct access to the US Gulf by very large crude

carriers (VLCCs) and ultra large crude carriers (ULCCs). Oil unloaded at LOOP is then pipelined

to shore in a 56-inch diameter line. LOOP is located 18 miles off the Louisiana coast in 115 feet (

about 35 meters) of water. Some VLCCs and ULCCs require water depths of 85 feet or 26

meters for safe operation. Thus, LOOP’s 35-meter water depth provides a safety cushion of

about a 35 percent. The IMO-comparable implicit safety margin for VLCCs or ULCCs are 112

25

percent for platforms cut at 55 meters. Even for an engineer, this seems too cautious. But in the

following section we use a 4,000 tonne weight and 55-meter water depth as a conservative

minimum criteria to define a “large” platform.

The other rationale for the IMO requirements may be to avoid interfering with trawling by

commercial fishermen. While such deep trawling may take place on a limited scale, any fishermen

doing so in all likelihood would have to have global positioning and navigation systems capable of

recognizing and avoiding remnants of partially removed platforms. In a relative sense, the area

precluded from trawling by a partially removed platform is insignificant.

4.2 - The geographic distribution and vintage of “large” platforms.

Figure 4.1 shows the distribution of platforms among major producing regions. Only

“major structures” are included. Major structures are those that have at least six wells and two

pieces of equipment. This excludes caissons, satellite platforms and well protectors as well as

some small platforms. The exclusion also explains the difference and between the platform totals

for the Gulf of Mexico referred to previously and that shown in the table. Also, not all major

structures are included, only those located in the 13 major producing areas.

The geographical distribution of all major structures is not indicative of the distribution of

large structures as we have defined them–i.e., as platforms that weigh more than 4,000 tonnes and

sit in waters at least 55 meters deep. As Figure 4.2 shows, large platforms are more evenly

26

Figure 4.1 - Offshore Platforms by Major Producing Region

Figure 4.2 - Number of “Large” Offshore Platforms by Major Producing Region

27

distributed than is the case for all platforms. Forty-eight percent of all the platforms included in

the tabulation used to make Figure 4.1 were located in the U.S.’s portion of the Gulf of Mexico

with 62 percent in other petroleum regions of the world. The U.S. Gulf of Mexico’s share of large

platforms is 29 percent with other regions accounting for the other 71 percent..

To see the relative importance of the disposition of large platforms in each region, the

relevant measure is large platforms as a percentage of all platforms. This is depicted in Figure 4.3.

The North Sea/North West Europe, Indian Sub-Continent, Brazil, Australia/New Zealand, and the

Far East, all show a relative proportion of large platforms at least three times larger than is the

case for the U.S. Gulf of Mexico. Further, four other regions (Southeast Asia, West Africa,

Central and South America except Brazil, and the Mediterranean/Black Seas) show proportions

larger than the U.S. Gulf, leaving only three with a smaller proportion. Thus, in relative terms,

the disposition of large platforms is not a U.S. Gulf of Mexico or a North Sea/Northwest Europe

problem.

The other measure needed to assess the severity of the offshore platform issue, in addition

to the geographical disposition, is how soon the disposition decision will be have to be made.

This depends on several factors: the nature of the geology, the life of the field, the development

strategy used to produce the field, whether the platforms perform other functions such as pipeline

pumping, processing, servicing, and quartering, the relevant regulatory requirements, and so on.

Each platform will be somewhat unique and should be evaluated on a platform-by-platform basis

to make a reliable estimate.

For the limited purposes of this paper, however, we will use only the median of the age

distribution of the platforms to evaluate the imminence of the disposition decision in the regions

28

Figure 4.3 - Large Platforms as a Percentage of All Platforms by Major Producing Region

included in our study. Figure 4.4 shows the median age of all major offshore platforms, those that

meet our criteria for a large platform as well as those that do not. Although we usually think of

the Gulf of Mexico as being the pioneer in offshore development, nine of the 12 other regions had

a median age that was equal to or greater than the median for major structures in the Gulf.

Figure 4.5 shows the median age of only the large platforms. Although the age differences

are smaller for large platforms, the pattern still holds. Seven of the 12 other regions had median

ages for large platforms that were equal to or greater than the U.S. Gulf. We have not examined

the age distribution for all producing regions, but, elsewhere,31 we have analyzed the data for the

U.S. Gulf of Mexico in more detail. The average age of major and non-major structures in the

U.S. Gulf has increased steadily, reaching 17 years for major structures in 1997.

However, the average age of structures that have been removed is significantly less. As of

29

Figure 4.4 - Median Age of All Platforms by Major Producing Region

Figure 4.5 - Median Age of “Large” Platforms by Major Producing Region

30

1997, the average age of major structures that had been removed was only 14 years. Not all of

these are “large platforms” using our definition. Using those located in waters at least 200 feet

deep as an approximation, 331 such platforms had been removed as of 1997. The average age of

these platforms at the time of their removal was 12.8 years.

These data reinforce the previous three graphs’ implication that platform disposition

policies are not a matter of concern only in the North Sea or the U.S. Gulf of Mexico. Indeed the

data suggest that the disposition of large platforms is an issue that is, in a relative sense, about as

imminent in 10 of the other 12 regions as it is in the U.S. Gulf of Mexico.

6. Implications and conclusions

6.1. Onshore disposition should be an option not a goal - In many natural resource

policy debates, the frequently idealized, pre-human-intervention situation is implicitly assumed to

be a state superior to all others. Given this assumption, the “relevant” policy question becomes:

How much would it cost to regain or make progress toward that “ideal,” and would the costs

result in serious, irreparable economic harm to those on whom they would ultimately rest?

Despite the strong support by environmental organizations for onshore-only-disposition,

there is little evidence that any of the other alternatives involving disposition at-sea would damage

the marine environment significantly or place it at risk. Accepted engineering practices require

that all wells be severed and permanently plugged and all the platform components other than bare

steel or concrete be removed under all disposition alternatives. We know of no studies that have

shown generic, detrimental environmental consequences from any of the disposition-at- sea

alternatives.

31

The primary effect on the environment of platform decommissioning is the reduction of

reef-like marine habitat that takes place when platforms are towed to shore or to deep ocean sites

for disposal. We know of no studies that argue that the value of leaving all or part of the platform

at sea is less than the value of complete removal and onshore salvage. Further, onshore disposal

also entails a number of risks to worker safety and environmental amenities that at-sea disposal

may avoid.

The inference of the commonly used pejorative for at-sea disposition,“ocean dumping,”is

that accumulated platforms from a depleted oil field would create some sort of functional or

aesthetic nuisance for other ocean users. This vision is inconsistent with the scale and density of

the exploration and development of an oil field with today’s technology. As the industry-

supported E&P Forum has pointed out, there are roughly 7,100 shipwrecks at the bottom of the

North Sea compared to about 300 operating platforms. With their adjacent buffer or safety zones

the platforms in the U.K.’s part of the North Sea take up about 0.05 percent of the sea bottom

which, E&P Forum asserts, is over-fished in any event.32

Finally, marine scientists have argued that the trawling is detrimental to the sea bed. In a

recent article in Conservation Biology33 trawling is compared to clear-cutting forest lands. But,

clear-cutting, the authors note, annually affects an area the size of the State of Indiana while

trawling takes place on an area twice the size of the contiguous United States. Thus platform

disposition practices which limit or, with management and planning, reduce the area of the sea bed

open to trawling may well enhance the overall marine environment.

32

6.2 - International Standard Setting - The campaign by Greenpeace to prevent the

sinking of the North Sea storage and transfer facility Brent Spar was so successful that it not only

achieved the immediate goal but secured their claim for leadership among environmental

organizations in this area of ocean and coastal policy. It also increased the political power of

environmental groups and the green political parties in Western Europe. As disposition decisions

come closer and the political power of the environmentalist side of the debate strengthens, siding

with “ocean dumpers” has become an increasingly uncomfortable position for many western

European politicians and their parties. This is an observation not a criticism. As a general principle

political response to changing public opinion is a good thing.

But it is important to understand that this is a response largely to political attitudes,

values and strengths in Western Europe, not to new scientific information, better engineering

practice, or changing economic analysis.

Unfortunately in this case, “good politics” may lead not only to “bad economics” but to

bad management of ocean resources. Procedures that involve the disposition (or a new use) of

platforms at sea are superior both environmentally and economically in some settings–especially

when large platforms in deep water are involved.

Large platforms form a very significant part of the total stock of platforms not only in the

North Sea but also in the Indian Subcontinent, Brazil, Australia/New Zealand and the Far East.

Further, in most regions the median age of large platforms is only slightly below the median age of

all platforms. Proper disposition of offshore platforms is not an issue only, or primarily, of

importance to developed countries. Many countries with large platforms are well within sight of

decommissioning decisions. These decisions will determine if they will bear the higher cost

33

implicit in the onshore-disposition-only standard or retain the options involving disposition at sea.

Although this analysis does not include an estimate of the cost of following the

“environmentally correct” standard, other studies indicate that it is substantial--not only adding to

monetary costs but also in losing potentially valuable marine habitat.

* * * * *

34

1. This article is based on a presentation at the APEC (Asia Pacific Economic Commission)workshop on platform decommissioning held in Jakarta Indonesia in October 1998.

2. “Onshore-only platform disposition” is usually stated in the negative as “no ocean dumping,”but “ocean dumping” covers too wide of a range of activities and its connotations are tooprejudicial for balanced public policy discussions. “Onshore-only disposition” is used here as amore descriptive and more neutral term.

3.OSPAR is the Oslo-Paris Environment Ministers organization that deals with maritime pollutionin the North East Atlantic. Belgium, Denmark, France, Finland, Germany, Iceland, Ireland,Norway, Portugal, Spain, Sweden, Switzerland, the UK and the European Union are its members.

4. See “What goes down must come up,” in Financial Times-Energy World, No. 99 (August,1998) for a forthright and spirited, if openly disdainful, discussion of the meeting. The article alsopoints out the irony of OSPAR’s concern that the industry would turn to concrete platforms toavoid costs of onshore disposition. In fact, some of the most modern platforms designed to beremoved and reused or, if desired, disposed of most easily and cheaply are made of concrete.Further the, Financial Times article points out, there are far more accessible and practicalloopholes in the agreement. Conversion of a steel platform to an artificial reef, for example, couldbe treated as a “new use” not subject to the on-shore only requirement and “derogations”or cases-by-case exceptions are allowed on economic as well as environmental grounds.

5. ICF Resources Inc. 1995 Impact on U.S. Companies of a Worldwide Ban on Disposal ofOffshore Oil and Gas Platforms at Sea. Prepared for the American Petroleum Institute, p. i.

6. In a Greenpeace press release, a spokesperson said, “The ban on dumping steel oil installationsis a total vindication for Greenpeace’s three year campaign, which began with the Brent Spar in1995. The European public–which did not want the sea used as a dump site–has won and our seaswill be the cleaner for it.” Press Release” GREENPEACE CLAIMS HISTORIC VICTORY ATOSPAR CONFERENCE, Greenpeace International, dated July 23, 1998.

7. Ironically, after pipeline technology and economics had made such structures rare for twodecades, they again are being seriously considered for use in deep water producing regions in theGulf of Mexico and elsewhere. The U.S. Minerals Management Service has issued request forproposals to address the environmental impacts that may result from their use.

8. See Clifton Curtis’ letter “You Can’t Hide, Even in the Sea,” Wall Street Journal, (July 7,1995) for a concise statement of Greenpeace’s argument.

9. See Bahree, B. et al. “Giant Outsmarted: How Greenpeace Sank Shell’s Plan to Dump Big OilRig in Atlantic: Environmentalists Used TV to Win the PR Battles While the Firm Bumbled:

Notes

35

Science Loses to Joe Six-Pack,” Wall Street Journal, July 7, 1995, p. A1

10. June 6, 1995, the cover and much of the issue featured the controversy.

11. Nesbet, E.G. and C.M.R. Fowler, “Is metal disposal toxic to deep oceans?” Nature Vol 375,(June 29, 1995) p.715, the editorial is entitled “Brent Spar, broken spur: Shell Oil’s decision notto sink a used oil-rig is a needless dereliction of rationality” Ibid., p. 708.

12. “Shell Finally Finds Home for Brent Spar As Wharf in Norway,” The Oil Daily, January 30,1998, p. 5.

13. Letter to the editor by Jonathan Hall, “Lessons of the Brent Spar,” Washington Post, July 7,1995, p. A20.

14. “Shocked Shell,” Wall Street Journal, June 20, 1995, p. A22.

15. See subtitle of editorial cited in note 9.

16.Bahree, B. et al., “Giant Outsmarted: How Greenpeace Sank Shell’s Plan to Dump Big Oil Rigin Atlantic,” Wall Street Journal, (July 7, 1995 ) p. A3.

17. See the nineteen point position paper by Clifton Curtis, Biodiversity/Oceans Advisor, PoliticalDivision, Greenpeace International, in Pulsipher, A.G. (ed) Proceedings: An InternationalWorkshop on Lease Abandonment and Platform Disposal: Technology, Regulation andEnvironmental Effects, April 1996. Center for Energy Studies, Louisiana State University. BatonRouge, Louisiana. MMS Contract 14-35-0001-30794, pp.31-33 for an admirably forthrightsummary of their position on the disposition of platforms. Although many subsidiaryconsiderations are stated, a fundamental theme is that “Oil is a threat to the environment fromextraction through production to its end use. The oil industry is neither clean nor sustainable.”Ibid., p. 32. The implication is that since oil production is such a fundamental threat, most thingsthat would increase its cost are justifiable and desirable on those grounds alone.

18. Success may lead to “mellowing.” The October 3, 1998, issue of the conservative andbusiness-oriented magazine The Economist carried a quarter page “help wanted” ad byGreenpeace for two “Issue Coordinators.”

19. See Watling, Les and Elliot A Norse, “Disturbance of the Seabed by Mobile Fishing Gear: AComparison with Forest Clear-Cutting,” pre-publication version of paper to be published inDecember, 1998 issue of Conservation Biology for a discussion of trawling.

20. ICF Resources, 1995, p. 3. The estimate is based on a survey of the literature, and ICF warnsthat estimates vary widely.

21.Pulsipher, Allan G., Daniel, William B., Kiesler, James F. and Mackey III, Vance. “Explosivesremain preferred alternative,” Oil and Gas Journal, May 6, 1996.

36

22. Pulsipher, A.G. (ed.) Proceedings: An International Workshop on Offshore LeaseAbandonment and Platform Disposal–Technology, Regulation and Environmental Effects, LSUCenter for Energy Studies, Baton Rouge, Louisiana, p.111.

23. Reggio, V.C. Jr., Rigs-to-Reefs: The use of obsolete petrolelum structures as artificial reefs.OCS Report MMS. 87-0015. New Orleans, LA U.S.D.O.I., MMS, 17p.

24. Wilson, Charles A., David R. Stanely, and Mark Miller, Louisiana’s Artificial Reef Program:Comparison of the Assemblage of Organisms at Two Artificial Reefs and a Production Platfromin the Northern Gulf of Mexico. 1998-99 Annual Report to the Louisiana Artificial Reef ProgramLouisiana Department of Wildlife and Fisheries, Coastal Fisheries Institute, Center for Coastal,Energy, and Environmental Resources; and Wilson, Charles A. and David R. Stanley TheLouisiana Artificial Reef Research Program 1997-98 Annual Report Ibid.

25. Ibid.

26. See a letter to the editor of the Oxford Energy Forum of February 1995 (p. 17-18) fromMichael Sutherland, Offshore Liaison Executive, Scottish Fishermen’s Federation for a forcefulargument on this point

27. In a presentation included in the Proceedings of an MMS-sponsored workshop,Decommissioning and removal of oil and gas facilities offshore California: recent experiencesand future deepwater challenges, Bud Danenberger, Chief of MMS’ Engineering and TechnologyDivision, reported that of a total of 1,559 platforms removed, only 113 had been converted intoartificial reefs. This represents a decline in the percentage converted from the ten to twelvepercent usually cited in the literature to only slightly more than seven percent.

28. Dauterive, L. “Rigs-to-Reefs Policy, Progress, and Perspectives,” Proceedings: 1999SPE/EPA Exploration and Production Environmental Conference, Austin TX, 28February -3March, 1999. p. 316.

29. There may be other reasons for this difference, but the fact that Louisiana uses designatedareas for artificial reef sites while Texas allows platforms to be toppled in-place if doing so wouldnot interfere with other ocean uses, e.g., navigation, is likely to be the most important factor.

30.It had been expected for some time that the 75 meter requirement would be “lowered” to 55meters. See Knott, David. “Brent spar experience haunts N. Sea platform abandonments,”Oil&Gas Journal, June 3, 1996.p.18. However the International Maritime Organization (IMO)has deepened the requirement to 100 meters for structures put in place after January 1, 1998 thatweigh less than 4,000 tons. IMO LC/SC 21/2/10 “Waste Assessment Guidance: Development ofWaste-Specific Guidance.” IMO standards permit partial removal and toppling in place as long asthe water column is cleared to a depth of 55 meters.

31.Pulsipher, Allan G. Iledare, O.O., Mesyanzhinov, D. V., Dupont, Alan, and Qiaozhen, LucyZhu. Forecasting the number of offshore platforms on the Gulf of Mexico to the year 2023. Draft

37

report submitted to the Minerals Management Service, Contract Number 14-35-0001-30660-19923. By the Center for Energy Studies, Louisiana State University, under a cooperativeagreement between MMS and LSU’s Coastal Marine Institute.

32. Prasthofer, P.H. Offshore Decommissioning and Disposal: Background Issues and Facts,Report No. 10.12/232 . E&P Forum: London 1995.

33. Watling, Les and Elliot A. Norse. “Disturbance of the Seabed by Mobile Fishing Gear: AComparison with Forest Clear-Cutting.” Pre-publication version, published in December 1998Conservation Biology.